With Branded Content, Programmatic On The Rise, Multichannel Networks May Face Uncertain Future

Programmatic or automated ad buying could put a stake in the heart of multichannel networks or force them to rethink their business model. One report suggests as programmatic buying grows and software tools make it easier to target specific demographics on YouTube and other Web video platforms, advertisers may find it easier to reach audiences without actually buying ads from MCNs, which don't own the media. It's actually a complicated mess.

The companies built on YouTube talent rely heavily on MCNs, per The Wall Street Journal. Executives at companies like Collective Digital Studio, who work with YouTube talent such as Epic Meal Time, spend a lot of time thinking about this issue. And while it’s early, they know their company needs a programmatic solution. In part, it means collecting data and using it to potentially target ads.

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Programmatic -- a fancy name for machine-to-machine advertising -- provides highly targeted ads while cutting labor-intensive tasks to create quick and seamless ad bidding, buying, and serving.

Digital video is the fastest-growing area of programmatic investment, but the trade dollars infused in this type of automated media buying will only account for a small share of U.S. digital video ad spend in 2015, per eMarketer. It won't remain that way. In the next 12 months, over-the-top (OTT) connected video TV sources like Roku, Apple TV or other IPTV-enabling devices such as Google's Chromecast and Amazon's Fire TV Stick will head into the programmatic TV category and begin funneling new inventory and advertising opportunities into programmatic, according to a eMarketer report. 

U.S. advertisers will spend $14.88 billion on programmatic digital display advertising in 2015, up 47.9% from the prior year. Investments will rise by 37.6% next year to $20.41 billion, or 63.0% of all U.S. digital display ad spending, eMarketer predicts.

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